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Daily Overview of Global Markets & the SEE Region (Monday, 6 May, 2019)
HIGHLIGHTS
WORLD ECONOMIC & MARKET DEVELOPMENTS
GLOBAL MARKETS: US President Donald Trump increased pressure on China on Sunday to reach a trade deal, threatening to raise tariffs on $200bn worth of Chinese imports to 25% from 10% as of Friday, unless progress is made on trade negotiations this week. In reaction to renewed escalation in US/China trade tensions, US equity futures point to a lower opening today and stocks across Asia fell. In FX markets, increased risk aversion favored the JPY’s safe haven appeal, while the EUR/USD remained trapped within the 1.1100-1.1300 range that has been prevailing since early April, in spite of solid US labor data.
GREECE: Institutions return to Greece today for the 3rd EPPS review, which is due to be released in June. The areas of focus are reportedly privatisations and potential pre-election benefits such as the scheme for the settlement of debts to the tax authorities and the social security funds. DBRS upgraded the Hellenic Republic’s Long-Term Foreign and Local Currency – Issuer Ratings to BB (low) from B (high) and changed the trend from Positive to Stable.
SOUTH EASTERN EUROPE
CESEE MARKET DEVELOPMENTS: Following US President’s Trump threat this weekend over additional tariffs on Chinese imports worth USD200bn, a Chinese cabinet, led by Vice Premier Liu He and consisted of c. 100 officials, is considering delaying (or cancelling) its trip to Washington which is scheduled for this Wednesday. As a result, at the time of writing emerging markets assets are falling, with the Chinese yuan and equities leading the losses, in fears of a possible trade dialogue collapse. Currently, the MSCI Emerging Markets Currency Index is dropping by 0.4% while the respective Equity index is falling by 1.5%, which is the biggest daily drop since last December. This week’s regional calendar is broadly filled with retail sales and industrial production data for March for a number of CESEE countries, among which Bulgaria and Romania. Our attention will be focused on the Spring Forecasts for the EU countries by the European Commission, released tomorrow at 12:00 CET.
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